There are a lot of confusing concepts you might encounter when it comes to end of life and estate planning needs. Most people think that all they need is a quick will and they’re covered. Then they discover other terms like trusts, powers of attorney and the like, and suddenly what seemed straightforward suddenly gets confusing.
What is a trust? How does it relate to a will? Should you choose one or another, or can you have both? What is the process for setting all of this up to make sure that your estate plan is as solid as it possibly can be? Discover the differences between setting up a will vs. trust, learn which is the better choice for your estate planning needs, and how they can work together.
Will vs. Trust
The first thing to understand when you’re considering a will vs. trust is that they’re not mutually exclusive. There are circumstances where a will is vital (indeed, most estate plans should have one) and others where a trust is the right move to make. Let’s look at each.
What Is a Will?
The will is the primary document in your end of life plan. It lays out all of your final wishes, and even talks about the establishment of any trusts you have set up. It’s signed and witnessed and issues instructions as to how your property will be divided among your heirs when you die. It can be revoked and amended at any time up till your death. You can also use it to appoint guardians for any minor children you have.
A trust allows for property management during your life and after your death. You can serve as your own trustee (the person who manages the trust) or you can appoint someone else to do so. If you are your own trustee, you can appoint a successor upon your death or in case of becoming incapacitated, without court intervention.
A living trust can also manage your property when you become disabled due to illness, accident or other means. It allows you to avoid the publicity and expense, as well as the stress, of dealing with courts when your estate comes into play.
Advantages of a Living Trust
A living trust helps you to avoid probate when you pass away. It allows you to plan for becoming potentially incapacitated. It lets you maintain control of what happens to your property after you’re gone, and can be used for any size estate. Finally, it can protect the privacy of your financial affairs.
Drawbacks of a Living Trust
Living trusts are not easy to draw up or secure. They can be expensive to set up. They must be actively funded, and the trust only can control the assets that are placed into it. Those assets then become the property of the trust, only accessible under specific situations. It’s also more difficult to change or revoke a trust than a will.
How to Decide Which is Best?
Deciding whether a will or a trust is best can often best be done with the help of an experienced professional in wills and trusts. For years, Tanko Law has helped people make these decisions across Montana, and we’re ready to help you as well. Call us today for a consultation about your will vs. trust questions.